Monday, March 11, 2013

Might be on to something

Unemployment continues to rise in the Eurozone and is increasingly drawing attention to its sluggish labour markets. There is a lingering suspicion that these markets are not flexible enough; that wage growth (real and in money terms) does not respond sufficiently to unemployment.

No Inspector Clouseau, he;

Excessively strong employment-protection legislation insulates the insiders – well-established employed workers on permanent contracts – from labour-market pressures, while the outsiders fill a succession of temporary, unprotected jobs and bear the brunt of business-cycle shocks: employment-protection legislation needs to be reformed to remove the sharp divide between workers on different types of contracts, and to lower the cost to employers of making severances.

Easier to fire, easier to hire. Now, try to convince the protected classes to see that.